New report explains in straightforward language what you need to know to stay in compliance with Microsoft's licensing rules

Microsoft's licensing terms are rarely simple -- as legions of you and your legal departments will attest.

Last week I explained the mechanics of "downgrading" from Windows 8 Pro to Windows 7 Professional. The article explains that those who had the foresight to buy a PC running Windows 8 Pro could, with Microsoft's blessing, wipe out Win8 Pro and install a clean copy of Win7 Professional on that PC using the same activation key. However, if saddled with a copy of Windows 8, you're stuck: To get Windows 7, you have to pay for a copy of Win7. Similarly, if you want to dual-boot Win8 and Win7, you have to pay for a copy of both OSes.

But before jumping in, it might be worth your time to look into the fine print of your licensing agreement -- if only to reassure yourself that Microsoft does indeed allow this particular "downgrade" for your situation.

Rob Horwitz at Directions on Microsoft has put together a free, short, plain-English whitepaper that talks about Microsoft product versions and editions and how "downgrades" may or may not apply in your specific instance. Called "Versions, Editions, Downgrades Are Key to Microsoft License Compliance," the paper will also help you understand other downgrade rights, including those associated with PC makers' licenses. It also has a brief introduction to volume licensing, its undying cohort Software Assurance, and its evil spawn CALs (client access licenses).

Horwitz comes up with several scenarios that defy logic. Here's my favorite:

A common noncompliant scenario of this type is a customer who purchased Office Professional Plus licenses but deployed Office Standard. Although somewhat counterintuitive, Office Professional Plus licenses do not include edition "downgrade" rights to Office Standard. Thus, in the event of an audit, Office Professional Plus licenses generally cannot be used to cover deployments of Office Standard, and a customer would have to purchase new licenses to match the edition deployed, or if a special exception were made, to redeploy the edition originally purchased.

He also notes that if you want to put Windows XP on a new PC (and your organization doesn't have a volume license with Software Assurance), you need to buy that new machine with Windows 7 Professional -- which has "downgrade" rights to XP Professional -- and not Windows 8 Pro. Why? Win8 Pro can be "downgraded" to Windows 7 Professional or Vista Professional, but the license can't be downgraded to XP.

If you've ever wondered about the arcana behind Microsoft's voluminous licensing rules, or if you're concerned that your server licensing just isn't right, this whitepaper is a good place to start.

Woody Leonhard writes computer books, primarily about Windows and Office; he's currently working on the Win 10 follow-up to the thousand-page "Windows 8.1 All-in-One for Dummies." A self-described "Windows victim," Woody specializes in telling the truth about Windows in a way that won't put you to sleep.